EU Bank Stress Tests: The Devil is in the Details

The most interesting part of the European Banking Authority's stress test lies not in the headlines

Erin Davis 18 July, 2011 | 10:04AM
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Last Friday, the European Banking Authority (EBA) released the long-awaited results of its bank stress tests. None of the European banks that we cover failed, and only eight of the 90 banks tested failed. The eight that failed include two state-owned Greek banks, four Spanish cajas and one Spanish bank, and one bank in Austria. All of the banks in Ireland, Italy, France, Germany, and the U.K. passed.

We think the most interesting part of the stress test lies not in the headlines but in the details. Once again, the stress tests did not include the potential impact of a sovereign default.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
NatWest Group PLC394.10 GBX-1.60Rating

About Author

Erin Davis  is a senior banking analyst for Morningstar.

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